Jul. 8—It's slowly returning to normal, but Bakersfield's rental housing market still hasn't gotten over the pandemic.
New data show local apartment vacancies rose in the second quarter but remained near recent years' historic lows. Similarly, rent increases have slowed noticeably, especially at the higher end, though lower-price units continue to get more expensive.
The local situation is at once an outlier — vacancies in most rental markets are much higher than the 2.73% ASU Commercial reported for Bakersfield last quarter — while also being predictable in the sense that similar suburban markets around the country saw a jump in demand that is now moderating overall.
"The Bakersfield market has been so low (vacancy) for so long that we have become accustomed to low rates that any increase gives us a moment to pause and consider what is occurring," ASU Commercial broker Marc Thurston, a specialist in Bakersfield multifamily properties, said by email.
Thurston's second-quarter data said vacancies citywide jumped 56 basis points from April through June. Rent growth during the first half of the year, mostly from class B and C apartments, was up 2.19% — just a quarter the size of last year's increase, he reported.
Bakersfield rent prices broken down by classes were not available, but ASU reported that the price of a two-bedroom apartment ranged from as low as $795 in north Bakersfield to $2,269 in northwest Bakersfield. The latter region had the priciest rents in town, followed by the western portion of southwest Bakersfield.
While 14 buildings had at least one size unit whose asking rents decreased in the second quarter, about four times that many had at least one size whose rent increased, Thurston reported. Seven properties had a mix of the two.
Investment activity cooled overall: The volume of apartment building sales at midyear amounted to just 17% of last year's total, while the average price per unit was off 6% in the second quarter — about half its decline in the first quarter.
As Thurston sees it, wages simply haven't kept up with inflation or recent rent growth. Class-A apartments may have become too expensive for many local wage-earners, who he said might have been tempted to simply buy their own homes.
"I think renters started looking for alternatives," he said. At the same time, he noted, more moderately priced B and C properties have overall become pricier, making up some of the difference.
Bakersfield housing investor Frank St. Clair agreed with Thurston's analysis, adding that A-class buildings "were just really out of sight, while B and C was still affordable for most people on a dual income."